4-Steps to moving 3 million REO properties with a 203k and other tools
Here is a simple (even oversimplified) action plan to move 3 million REO properties:
1. Reduce overall market inventory by an aggressive Short Sale/Refinance program This will stop the flow of new inventory onto the market, keep people in their homes and reduce new foreclosures. To accomplish this, lenders should be pressured to reduce principal amounts on 1st mortgages to a level of affordable payments. Then place a “soft 2nd” for the remaining balance that balloons in 5 years when the market and economy are likely to be doing much better.
2. Bring back the Investor 203k with terms that encourage local individual investors to risk their own capital and take action to buy, fix and sell or rent as local markets dictate. This will invigorate local markets and stimulate local economies much more than any institutional bulk sale can ever do.
3. Offer the same discounts to individual buyers that are being considered for the bulk institutional buyers. After all, why should the individual homeowner have to pay the institutional buyers a higher price (to account for their profit). The discounted prices could be and should be offered to individuals who after all, are the taxpayers paying for the government bailouts anyway. Get a 1,000 points of light who are motivated to do something with these properties and ignite energy throughout the country.
4. Allow institutional bulk buyers, but only after a certain “bid period” that allows individuals to buy at the same, or close to the same discounted prices as those being considered for institutional buyers.
This is THE BEST buying opportunity and the BIGGEST market correction in history with the LOWEST interest rates ever! Individuals should be given every tool and every opportunity to invest right now BEFORE the market turns upward. The FHA 203k loan program is a safe and efficient financing option.
True many cannot afford to, but those who can should and they will help stimulate the economy and change the attitude which will help those who do not yet qualify.
There’s more to do of course, but I hope that does provide some clear steps for housing professionals, government policy makers and individuals to make decisions about investing in our future.
My website www.203kServices.com and my Blog “Today’s Real Estate Matters” at www.203kExperts.com has information about how to use the FHA 203k as a tool in today’s market. You can reach me by email at vsimone@203kServices.com